Apollo Agrees $7.7 Billion Takeover of EasyJet as Castlelake Ends Bid

Post by : Saif

Apollo Global Management has agreed to acquire British low-cost airline EasyJet in a deal valued at approximately £5.7 billion ($7.7 billion), bringing months of takeover speculation to an end after rival bidder Castlelake officially withdrew from the race.

The agreement marks one of the largest aviation transactions of the year and reflects continued interest from private equity firms in major UK-listed companies.

EasyJet Board Backs Apollo Offer

EasyJet's board unanimously recommended Apollo's all-cash offer, describing it as fair and attractive for shareholders.

Company Chairman Stephen Hester said the offer recognizes the strength of EasyJet's business while providing shareholders with immediate and certain value.

EasyJet founder Stelios Haji-Ioannou also announced his support for the transaction, stating that his family would back the board's recommendation after reviewing Apollo's proposal.

Castlelake Ends Takeover Pursuit

Private investment firm Castlelake had pursued EasyJet for several months and submitted multiple offers before Apollo entered the bidding process with a higher proposal.

Apollo's £5.7 billion offer exceeded Castlelake's previous £5.5 billion bid, leading Castlelake to withdraw without publicly explaining its decision.

The conclusion of the bidding process removes uncertainty surrounding the airline's ownership after months of market speculation.

EU Ownership Rules Remain Key Hurdle

Although the acquisition has received board approval, the transaction must satisfy European Union airline ownership regulations.

Under EU aviation rules, airlines operating within the bloc must remain majority owned and effectively controlled by EU interests to preserve their operating rights.

To address these requirements, Apollo said shareholders linked to EasyJet founder Stelios Haji-Ioannou and other investors are expected to retain between 45.1% and 49.9% ownership of the purchasing vehicle.

An independent EU management trust is expected to hold up to 5%, while Apollo's investment funds will own the remaining stake within regulatory limits.

Authorities in the United Kingdom are also monitoring the transaction as part of the approval process.

Private Ownership May Support Long-Term Strategy

Apollo said it plans to accelerate EasyJet's commercial strategy, including expanding its growing holidays business and strengthening its position in the European leisure travel market.

Industry analysts believe private ownership could give the airline greater flexibility by reducing pressure from quarterly earnings expectations and allowing management to focus on long-term investments.

The move could also help EasyJet navigate rising operating costs linked to higher fuel prices and continued geopolitical uncertainty affecting the aviation sector.

EasyJet Shares Rise

EasyJet shares gained following confirmation of the agreement but continued to trade below Apollo's offer price, reflecting investor caution over the regulatory approval process.

Market analysts said the valuation gap largely reflects concerns that satisfying EU ownership requirements remains one of the biggest challenges before the acquisition can be completed.

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